The world’s a stage

KEY POINTS

• EBTs and EFRBs under attack.
• The arrangement must have a commercial purpose.
• Role of the trustees.
• Courts are taking a holistic view.

We were warned. HMRC’s hostility to the perceived abuse of employee benefit trusts (EBTs) and employer-financed retirement benefit schemes (EFRBS) was well known.

Spotlights 5 and 6 issued in August 2009 made it clear that where such arrangements were used for tax planning purposes they would be fair game so far as HMRC were concerned.

The Revenue’s perception that EBTs and EFRBS were being widely used for tax avoidance purposes was to be fair not without foundation. Further announcements followed in the March and June Budgets that they would be the subject of review.

Draft legislation was published on 9 December under the heading ‘Employment income through...